80 Catholic leaders ask Thune, Schumer to revisit CLARITY Act Section 604

The Alliance to End Human Trafficking, joined by Catholic Charities USA and roughly 80 other Catholic leaders and survivor advocates, has delivered a letter to Senate Majority Leader John Thune and Minority Leader Chuck Schumer asking them to revisit Section 604 of the Digital Asset Market Clarity Act (H.R. 3633). The letter argues the section's carve-out for "non-controlling" blockchain developers would weaken the legal tools used to investigate trafficking, child exploitation and sanctions evasion routed through digital assets. The story was reported by The Block on June 24, 2026 and amplified by CoinDesk on June 26, 2026; the Global Sisters Report carries the Alliance's own statement on the filing.

What the letter says

The signatories — listed across the Catholic-led coalition statement — focus on a single clause. Section 604 codifies the Blockchain Regulatory Certainty Act (BRCA), first introduced in 2018, which states that a developer or infrastructure provider who cannot move or control a user's digital assets is not a money transmitter under federal law. The letter calls the provision a removal of "non-custodial developers from the money-transmitter classification," which strips the transaction-monitoring and suspicious-activity-reporting obligations on which the federal anti-money-laundering framework depends.

Katie Boller Gosewisch, executive director of the Alliance to End Human Trafficking, framed the operational concern bluntly: third-party platform developers could "hide behind" a lack of liability if their software is used to facilitate trafficking-related payments. The signatories are not asking the Senate to kill the bill — they are asking for the Section 604 language to be tightened so that intent and pattern of use can re-attach liability.

The disputed text

Section 604 is the section that distinguishes a non-controlling blockchain developer from a regulated intermediary. The threshold test, as drafted in H.R. 3633, turns on three cumulative factors:

A developer or service provider qualifies for the Section 604
carve-out only if it:
 (1) lacks the legal right to control user transactions;
 (2) lacks the unilateral ability to initiate transactions on
     a customer's behalf; and
 (3) cannot effectuate a transfer without another party's
     approval.

Activities that, alone, do not trigger money-transmitter
status under the section:
 - publishing or maintaining open-source blockchain software;
 - providing maintenance services to a blockchain service;
 - supplying hardware or software that enables a customer's
   own self-custody of digital assets;
 - providing infrastructure support to a blockchain service.

Source: H.R. 3633 (119th Congress), Section 604; summary in the
Senate Banking Committee section-by-section markup.

Section 604 is folded into the larger market-structure framework that splits SEC and CFTC jurisdiction over digital commodities and digital securities — the bigger fight that has dominated the Senate process since spring.

Legislative status

• House: H.R. 3633 passed 294-134 on July 17, 2025 — a comfortable bipartisan margin.
• Senate Banking Committee: cleared the bill 15-9 in May 2026, placing it on the Senate Legislative Calendar.
• Senate floor: no vote scheduled. Sixty votes needed to invoke cloture. Senators Mark Warner and Catherine Cortez Masto have publicly tied their floor support to law enforcement's sign-off on Section 604, which is the leverage point this letter targets.
• Reconciliation: the Senate Agriculture Committee is preparing its own version covering digital commodities; the two must be merged before a final text reaches the president.

Who else is pushing back

The Catholic-led letter is the third coordinated objection to land in two months. The National District Attorneys' Association has separately written that Section 604 would "severely impede" the ability of state prosecutors to investigate, trace and prosecute cryptocurrency-linked crime. Law-enforcement groups had already raised concerns earlier in June, as covered by Bitcoin Magazine on June 24. The industry counter-letter, also covered by Bitcoin Magazine, urges the Senate to pass the bill with Section 604 intact — the developer carve-out being, in that camp's view, the bill's load-bearing element for U.S.-based open-source contributors.

Why the timing matters

The political window is narrow. Senate leadership is trying to clear a vehicle before the July recess, with the GENIUS stablecoin rules already on a July 18 implementation track and the broader market-structure debate now overlapping the appropriations calendar. A floor amendment to Section 604 — re-attaching some form of intent-based liability, or carving out exchanges and front-ends from the protection — would be the most likely compromise to surface. A clean strip-out of Section 604 is harder: the section is the part of the bill that secured the most Republican and crypto-industry support in the House.

The reading from the Senate cloakroom this week, per The Hill on June 23, is that the bill is closer to a floor vote than at any point in 2026, but that the AML and developer-liability questions raised by this coalition are exactly the questions Warner and Cortez Masto will demand answers to before voting yes.

What to watch

1. A Senate manager's amendment to Section 604. If one surfaces, the test is whether it preserves the non-custodial carve-out while adding an intent or knowing-use trigger. That language would be modeled on existing 18 U.S.C. § 1960 jurisprudence, the federal money-transmitting-business statute.
2. The Cortez Masto / Warner statements. A public floor commitment from either senator — for or against — is the cleanest leading indicator on whether the bill clears cloture.
3. A FinCEN guidance signal. The Treasury bureau has previously taken the position, in 2019 guidance, that anonymizing software and non-custodial wallet providers are not money transmitters; a refresh in either direction would directly affect the Section 604 debate.
4. Reconciliation timing with the Senate Agriculture Committee version. Even if the Banking version moves, a divergent Ag text would push final passage past the August recess.

Pattern — Section 604 has been the lightning rod from day one

The Section 604 language is not new — it traces directly to the Blockchain Regulatory Certainty Act introduced and reintroduced in successive Congresses since 2018. Every time the language has moved closer to passage, a coalition of law enforcement and anti-trafficking advocates has surfaced the same objection. This is the third time in the 119th Congress alone the coalition has formally written to Senate leadership. The fight is structural: U.S. AML law was built around custodial intermediaries, and Section 604 is the most explicit statutory acknowledgement to date that the on-chain stack does not always have one.

Sources:

• The Block — Nearly 100 Catholic leaders oppose Clarity Act over weakened safeguards — June 24, 2026.
• CoinDesk — Anti-trafficking group says CLARITY Act's Section 604 could weaken accountability — June 26, 2026.
• Global Sisters Report — Alliance to End Human Trafficking urges Senate leadership to strengthen anti-trafficking safeguards in digital asset legislation — coalition statement.
• Bitcoin Magazine — Law enforcement, Catholic groups send letters to U.S. government warning CLARITY Act would create crypto crime loopholes.
• crypto.news — CLARITY Act critics say Section 604 may weaken crypto crime investigations.
• The Cryptotimes — 80+ Advocates Urge Senate to Tighten CLARITY Act Safeguards.
• Congress.gov — H.R. 3633, Digital Asset Market Clarity Act (119th Congress) — bill text and status.
• The Hill — Obstacles threaten success of Clarity Act in Senate — June 23, 2026.